DATE:
March 18, 2025
TO:
Mayor and Council Members
FROM:
Rachel Molina, City Manager
BY:
Pam Lee, City Attorney
SUBJECT:
Dayco Funding Corporation, et al. Settlement Agreement
RECOMMENDED ACTION
It is recommended that the City Council approve the attached settlement agreement in the pending litigation matter Dayco Funding Corporation, et al. v. City of Hesperia (SBSC Case No. CIVSB2307020) regarding the development of approximately 40 acres of vacant land along the south side of Mojave Street between Topaz Avenue and Datura Road in the City of Hesperia, CA 92345, identified as Assessor's Parcel Numbers 0405-261-15,16,17,18, 27, 28, 29 & 30- 0000 (the "Property").
BACKGROUND
Subdividers Dayco Funding Corporation and NV Hesperia Investors, LLC own the land for which Tentative Map 17916 (TM-17916) was proposed. TM-17916 is a 177 lot subdivision of 40 acres located at the southwestern corner of Mojave Street and Topaz Avenue. On July 9, 2009 the City’s Planning Commission conditionally approved TM-17916. Various legislatively adopted automatic extensions extended the life of TM-17916 to August 21, 2022.
Prior to the final expiration date of the TM-17916, August 21, 2022, the Subdividers had submitted various documents comprising the Final Map package that Subdividers contend demonstrated the Final Map was in substantial conformance with TM-17916. However, City staff disagreed and contended the Final Map package was incomplete in several material respects.
On August 19, 2022, two days before the expiration of the map on August 21, 2022, Petitioners filed an application for an extension of TM-17916. This had the effect of granting an extension of TM-17916 for 60 days of the date the application for the extension or until the date the extension application is approved, conditionally approved, or denied. (Gov. Code § 66452.6(e)). On September 6, 2022 the Petitioners provided the City with a fully executed Subdivision Improvement Agreement and some of the necessary cash deposits required. However, they failed to provide the City with the required improvement security, stating it would be provided on September 20, 2022. On September 7, 2022 the City’s Development Review Committee considered and denied the application to extend the life of TM-17916. Pursuant to Hesperia Municipal Code section 17.08.050(e), if the Final Map is not officially filed within the life of a tentative map, all proceedings regarding the map are terminated and the applicant must file a new tentative map.
After the DRC denied the extension of TM-17916 the Petitioners appealed the decision to the Planning Commission that considered and denied the appeal on November 10, 2022. The Planning Commission’s denial was appealed to the City Council, which denied the appeal on December 20, 2022.
Thereafter, on March 17, 2023 the Subdividers initiated litigation regarding the City’s denial of TM-17916. After several months of settlement discussions, the City and the Subdividers have come to an agreement regarding TM-17916 and a settlement of the pending litigation. The proposed Settlement Agreement, attached hereto as Attachment 1, provides that the developer will be permitted to submit all required documents pertaining to the Phase 1 Final Map for TM-17916 as soon as reasonably possible for review, approval, and recordation, which is anticipated to occur within the next six (6) months.
Upon the recordation of the Phase 1 final map, TM-17916 will be extended for a period not to exceed 48 months from the date of recordation, pursuant to Government Code section 664552.6(a). The Subdivider will also be afforded the opportunity to complete and submit an application for Phase 2 Final Map for TM-17916, in accordance with the conditions set forth in TM-17916, the City’s Municipal Code, the subdivision Map Act, and any other applicable law in effect as of. Furthermore, any construction of infrastructure improvements for the Project, including but not limited to the A-04 drainage improvements, will be credited against any development impact fees owed by the developer to the City.
Within thirty (30) days after the City provides written confirmation that the Phase 1 Final map of TM-17916 has been recorded, and TM-157916 has been extended in accordance with the settlement agreement, the developer will file a Request for/Notice of Dismissal of the pending litigation. Each party shall bear its own costs and fees incurred in this litigation.
ENVIRONMENTAL REVIEW
The Project already completed an environmental review and a Mitigated Negative Declaration was prepared and adopted as part of the original Project. No proposed changes to the original Project are contemplated, so the approved Mitigated Negative Declaration is still applicable.
CITY GOAL SUPPORTED
Financial Health – Maintain a balanced budget and adequate reserves.
FISCAL IMPACT
There are no fiscal impacts identified with this action.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
Settlement Agreement and General Release
01071.0061/1060262.1
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the City Council
March 18, 2025